The Fixed Income Playbook for Trumpanomics

Donald Trump roiled markets with a surprise victory over Hillary Clinton bringing the White House back under Republican control. Even more importantly, he has been given a mandate to pursue his economic policies as Republicans retained control over both the Senate and House of Representatives. Initial flight-to-quality trades lasted only of a couple hours (mostly coming in illiquid after-markets) and have rapidly reversed. Equities are rallying, gold is selling off, treasuries are getting bludgeoned, and industrial metals have continued to move higher. The market is adjusting to the replacement of U.S. government sterility and gridlock with the unified Republican mandate of growth. Investors should take notice and adjust their portfolio accordingly – this market action will have follow through.